Musk Pauses Twitter Deal On Information Known Since 2019, Shares Plummet

Elon Musk's $44 billion acquisition of Twitter is on hold, according to the Tesla CEO and billionaire, due to the level of fake accounts.

However, the details Musk is citing as the reason have been known since 2019, Newsweek has learned. Musk's announcement that the deal is on hold wiped 15 percent off Twitter's share price in pre-market trading.

Musk said in a tweet on Friday: "Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users"

Musk's on-hold statement included a link to a Reuters article in which a brief summary of the filing mentioned the 5 percent figure. The article made no mention of previous filings.

Twitter said in its first quarter 2022 letter to shareholders that

We have performed an internal review of a sample of accounts and estimate that the average of false or spam accounts during the first quarter of 2022 represented fewer than 5% of our mDAU during the quarter. The false or spam accounts for a period represents the average of false or spam accounts in the samples during each monthly analysis period during the quarter. In making this determination, we applied significant judgment, so our estimation of false or spam accounts may not accurately represent the actual number of such accounts, and the actual number of false or spam accounts could be higher than we have estimated.

However, the company has said almost word-for-word the same thing in the previous 11 quarterly reports, changing only the date in the first sentence. The figure, 5 percent, has been constant.

All of Twitter's previous reports are available on the company's investor site. The first to mention the fake account rate was the second quarter of 2019—nearly three years ago.

The news from Musk sent the Twitter share price tumbling in pre-market trading.

At one stage shares were trading at just $34 dollars, nearly $20 lower than Musk's offer. At time of writing shares were trading at $40.40 per share, down around 10 percent. The price that Musk has put on Twitter is $54.20 per share, around $44 billion in total.

Musk has been vocal about free speech and fake accounts on the Twitter, and announced that he thought former president Donald Trump should be reinstated to the platform.

The South African entrepreneur has said that one of his priorities when taking over the social media platform would be to remove "spam bots" from it and find a way of verifying all humans.

Musk will have to pay a termination fee of $1 billion if he walks away from the Twitter deal.

Musk's office has been approached for comment.

Elon Musk Met Gala
Elon Musk attends The 2022 Met Gala. The Tesla CEO has put his acquisition of Twitter on hold. Getty Images